That's a nice tidy looking machine you found there! Looks like it's been well taken care of! In my limited experience with them they are pretty robust little things, mine was very worn but still worked well when I sold it which I wish I never did...
When I say the 3 position lever locks it from going one way I mean it won't travel either forwards or backwards depending on which way you have the lever set, that way you can dig a trench and reposition the machine without having to constantly release and reset the dogs every time you move; the machine will still turn left or right. As for the drive chains, I mean the ones down by the tracks, the one up by the gearbox never gave me any trouble. If you're interested, I do have a video of when I took delivery of it on my youtube channel, it's here:
https://www.youtube.com/watch?v=Ioe8Zle-WOk As you can hear in the video, the dogs were set in the one direction and that is the clink clink clink noise you hear as it's travelling off the lowbed. Have you operated the machine yet? If not, I'll have a look and see if I can find a picture or two of the cab and give you an idea of what all the controls do.
Cheers!